Cognizant has forecast a marginal increase in revenue for the current year providing a sliver of hope for an industry grappling with slowing growth.

The technology outsourcing company axed over 4,000 jobs in the previous quarter - the highest amongst industry peers - indicating the challenges ahead for software engineers as the threat of automation and rising protectionism loom large over the sector.

Cognizant said it expects a revenue growth of 9-10% in 2017. It had previously forecast a growth of 8-10% for the year.

It announced a revenue of $3.67 billion for the second quarter up 3.5% from the first quarter. Net income stood at $470 million. “Cognizant delivered strong second quarter results, which reflect our continued progress in helping clients achieve the value of digitizing their entire enterprises, or what we call being digital at scale,“ CEO Francisco D'Souza said in a statement.

In the third quarter, the Teaneck-New Jersey headquartered company expects to grow at a rate of 1.6 to 3%. “We remain dedicated to accelerating our shift to digital services and solutions as we continue to invest in our core business and execute our margin improvement and capital return programmes,“ he said.

The company employed 2,56,800 people at the end of June, down from 2,61,200 at the end of March. Competitors like Tata Consultancy Services, Infosys and Tech Mahindra also reported lower headcount numbers in the same period, while Wipro and HCL Technologies both added jobs.

Cognizant had offered a voluntary separation scheme to senior employees and was letting go of over 5,000 employees as part of its annual appraisal process, ET has previously reported. About 400 employees signed up for the voluntary separation scheme, the company said.

“I think you will start to see the headcount go up from here. I don't think we will see another sequential decline,“ Rajeev Mehta, president at Cognizant, told ET in an interview.

The company took $39 million in charges this quarter, mostly related to severance. It will continue to see some severance related charges in other quarters, CFO Karen McLoughlin said on a post-earnings conference call.

She added that the company would continue to manage its headcount but that it would now hire from critical skills. Gross hiring in the quarter stood at 10,800 she said.

Cognizant's forecast of higher revenue growth is a positive sign for the industry at large, although the outlook is not completely comparable. Cognizant provides guidance for the calendar year and in reported currency. The National Association of Software and Services Companies expects the Indian IT industry to grow between 7-8% in constant currency in fiscal 2018.

Like other IT companies, Cognizant said it saw some weakness in the banking space as larger banks were being conservative in their spending and holding back on some discretionary projects.

Analysts are of the view that though Cognizant mildly beat expectations, more quarters of consistent execution was needed. “While revenue was just a touch above consensus (EPS beat more meaningfully), we think that another quarter of consistent execution could further help to improve valuation,“ David Koning, analyst with RW Baird, said in a note.